Open Enrollment

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What Is Open Enrollment?

Open Enrollment is a period each year when changes can be made to Affordable Care Act (ACA) plans. During Open Enrollment, Texas consumers can evaluate their plan options for the coming year and change coverage with a January 1 effective date.  Open Enrollment is also the time if individuals have qualified for subsidies, which are paid by the federal government, that their subsidy application is updated, and the subsidy amount is adjusted and applied to next year’s premium.  All changes to coverage must be completed during Open Enrollment or an individual must qualify for a Special Enrollment Period to be insured by an ACA plan after the close of Open Enrollment.

History

The ACA was signed into law on March 23, 2010, as amended by the Health Care and Education Reconciliation Act, signed March 31, 2010. The over 900-page legislation was also referred to as the Patient Protection and Affordable Care Act, “federal health reform” or Obamacare.  

The goal of the ACA was to expand access to insurance, mandate consumer protections, emphasize prevention and wellness, improve quality, expand the healthcare workforce and slow the increase in healthcare spending.

Expansion of health insurance participation was applied to both the employer group and individual market. Employers were encouraged to provide coverage for employees or be subject to penalties if the company was not classified as a small business. Individuals were motivated to participate in healthcare reform by requiring individuals to be insured or be subject to a fine known as the Personal Responsibility Fine.  Individuals whose income would be above 133% of the federal poverty line and below 400% would be eligible for subsidies paid by the federal government to reduce the financial impact of health insurance. The subsidy applications would be administered by either state-based exchanges or federal government sponsored exchanges.

Important Dates

In the past individuals could apply for health insurance coverage at any time during the year. Once the ACA was implemented and established, Open Enrollment was adopted. The first Open Enrollment commenced on October 1, 2013 and concluded on March 31, 2014. Subsequent years witnessed a reduction in the number of days allocated towards Open Enrollment. The next Open Enrollment began on November 15, 2014 and ended on February 15, 2015. Open Enrollments for 2016 and 2017 ran from November 1 to January 31. Open Enrollment for 2018 started the limited enrollment period from November 1 to December 15, which has been the standard since.  

The purpose of the Open Enrollment period is to focus attention on health insurance enrollment and to reduce adverse selection. Adverse selection occurs when individuals with higher risk or illness, who have increased coverage needs, wait until they have a health crisis to purchase insurance. This results in an unequal distribution of unhealthy individuals enrolling in insurance relative to the premium paid because enrollment was delayed. Open Enrollment encourages a large number of individuals to secure coverage, which promotes the even distribution of healthy and sick policyholders all paying premium.

March 23, 2010

Affordable Care Act (ACA) signed into law by President Obama

October 23, 2010

Major provisions of ACA become active.

November 14, 2011

The United States Supreme Court agrees to hear arguments in the Obamacare case brought by 26 states and the National Federation of Independent Business. It argues that elements of the ACA are unconstitutional.

July 9, 2012

Governor Perry announces that Texas will not establish a state sponsored health insurance exchange. Texas will rely on the federal government to implement the exchange in
Texas.

October 1, 2012

Carriers are required to adopt standardized summary of benefit documents for communications to policyholders.

October 2013

Plans to be available in the exchange and outside of the exchange will be available to quote for a January 1, 2014 effective date.

March 4, 2015 – King v. Burwell

The U.S. Supreme Court hears oral arguments for King v. Burwell, a lawsuit challenging U.S. Treasury regulation, 26 C.F.R. § 1.36B-2(a)(1), issued under the Patient Protection and Affordable Care Act (ACA). King argues that the ACA only allows subsidies to be distributed through state-run exchanges, and that regulations implemented by the IRS exceed the authority granted to it by Congress.

June 25, 2015 – King v. Burwell

The Supreme Court ruled 6-3 that subsidies could be distributed through Healthcare.gov, the Federal Exchange, if a state did not set up its own exchange.

January 2018

Under the Affordable Care Act, all existing health insurance plans must cover preventative care and checkups without co-pays.

On-Marketplace and Off-Marketplace Plans

An individual has the option of applying either for an On-Marketplace or Off-Marketplace health insurance coverage plan. There is very little difference between the two options, with the most significant difference being who pays for the premium.

For individuals to qualify for an On-Marketplace plan, their household income must be between the Federal Poverty Line (FPL) and 400% of the FPL.

Off-Marketplace plans are purchased from an insurance carrier and will not offer a subsidy to reduce the premium amount.

Special Enrollment Period (SEP)

An individual also has a Special Enrollment Period (SEP) if the individual experiences a Qualifying Life Event (QLE) outside of the annual Open Enrollment Period.

  • Loss of Essential Health Coverage – includes loss of employer coverage or loss of Medicaid or CHIP as a result of a reported change in household income or other circumstances.

  • Change In Family Size – marriage, divorce, death of a family member, birth, or adoption.

  • Change In Citizenship – gaining status as a citizen or a lawfully present individual in the U.S.

  • Enrollment Error – experienced an error in your original enrollment.

  • Violation of Plan Benefits – an individual who enrolled in a qualified health plan and is able to demonstrate that the plan substantially violated a material provision of the plan.

  • Change In Premium Subsidy Eligibility – becoming newly eligible or newly ineligible for the premium subsidy or cost sharing reductions.

  • Relocation – new plans become available based on moving to a new area.

  • Native American and Indian – the individual is an Indian, as defined by the Indian Health Care Improvement Act.

  • Exceptional Circumstances – a qualified enrollee is subject to other exceptional circumstances as determined by the Exchange.

Typically, if an individual is applying during a SEP, they will be required to provide documentation that a life event has occurred. Either the Health Insurance Marketplace or the insurance carrier will review the documentation to verify that the individual qualifies for the SEP.

Subsidies

If an individual qualifies for a subsidy based on their household income, the amount of the subsidy, which is paid by the federal government directly to the insurance carrier, is used to reduce the monthly premium. Many times, depending on income, the subsidy can pay the full amount of the premium. 

 

The below chart details the Federal Poverty Level amounts, per household, that qualify for subsidies.

 

Persons in
Family/Household
Federal Poverty Level (Low)Federal Poverty Level (High)
1$12,760$51,040
2$17,240$68,960
3$21,720$86,880
4$26,200$104,800
5$30,680$122,720

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